IBT lays off at least 30 people, spins off Newsweek

IBT Media unexpectedly laid off more than 30 journalists amid a major reorganization on Thursday, POLITICO has learned.

One person who was laid off said that IBT eliminated its international, business, technology, media and culture news desks, along with its graphics team and its copy desk. Only the entertainment, sports, and breaking news desks were spared cuts.

In total, 32 people were laid off in Thursday's cuts, more than half of the newsroom, which now consists of 23 employees. (In January, IBT's newsroom consisted of 85 staffers.)

The cuts extended beyond the IBT newsroom. Medical Daily, a niche news site owned by IBT Media, lost five reporters and editors — about half of its total editorial staff. IBT Media also cut laid off at least 11 non-editorial staffers, including its entire product team and a number of developers. Recode reported that a handful of layoffs at Newsweek, also owned by IBT Media, will be announced on Friday.

Laid-off journalists who do not find new jobs within two weeks will be eligible for small severance packages — one week of pay for every year with the company. Most of the laid-off employees had been with IBT Media for fewer than four years.

On the same day as the layoffs, IBT Media announced a corporate restructuring. The company will spin off Newsweek into a separate operational entity and will integrate IBT with Medical Daily, Latin Times and other niche media properties owned by IBT Media.

"This restructuring will allow us to continue to support the growth of IBT Media and Newsweek," IBT Media CEO Etienne Uzac said in a statement. "Our overall plan, which includes some staff downsizing, is part of an overall plan to drive efficiencies throughout the company."

Staffers were informed a little before 3 p.m. Thursday of the cuts, which was followed by an all-hands meeting with Dayan Candappa, IBT's global editor in chief, and human resources. During the meeting, Candappa told staff the decision was financially driven. Those verticals that were not bringing in traffic were axed while those with the highest traffic were spared.

The layoffs blindsided the newsroom, which had been repeatedly told by the company's co-founders — Uzac and chief content officer Johnathan Davis — that the company was on firm financial footing.

In February, after the company failed to pay its employees on time, Uzac said that the payment problems did not reflect poor finances.

"There has been no discussion of budget cuts or hiring freezes. I very forthrightly pressed Etienne on this question. He assured me that we’re not there and that we’ve got sufficient funds and that this is poor management by finance and we’re bringing in a chief operating officer to address these problems," IBT's then-editor in chief Peter Goodman told POLITICO at the time.

"Over the past few months we have been strategically restructuring the company in order to adapt to the changes in the market and to insure IBT Media has a strong path to continued growth. ... These changes are concluded as of today," Uzac and Davis wrote in a memo to employees.

As recently as last Friday, one person who was laid off told POLITICO, Candappa talked to the newsroom about potential new hires. He did not give any indication that the company’s finances were in trouble or that there may be layoffs.

On Tuesday, IBT media reporter Brendan James tweeted that he was moving off of the media beat to work alongside editor David Sirota and reporter Ned Resnikoff on the money in politics beat.